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A Blueprint for Sustainable Manufacturing

With residential and commercial construction at a virtual standstill in recent months, the recession has made for fairly grim times in the floor-covering industry.

But when it comes to sustainability, Calhoun, Ga.-based Mohawk Industries Inc. believes it has a story with a happy ending -- environmentally and economically.

Amid the white noise of greenwashing in all industries today, Mohawk, which posted net sales of $6.8 billion in 2008, isn't just spinning a good yarn. Among many tangible examples of its commitment to sustainable manufacturing, the company:

Each year takes in 3 billion plastic containers. Those made from polyethylene terephthalate are used to produce approximately 170 million pounds of recycled fiber at its Summerville, Ga., plant, according to the company. The fiber then is used to make Mohawk carpets.

Operates a 40,000-square-foot recycling facility in Chatsworth, Ga., called the Greenworks Center, which takes in post-consumer residential carpet from all over the country. The center processes 100% of the carpet-fiber, backing and latex -- and recovers about 90% of all materials into useable products. Mohawk claims this is the highest recovery rate in the industry -- approximately three times that of the next-best carpet-recycling program.

Boasts a growing number of product materials that contain recycled content and that are made with sustainable processes. For example, Mohawk's Colorstrand Solution dyed nylon fiber for commercial carpet products contains 15% pre-consumer recycled content and is manufactured in a process that consumes no water or steam, according to the company. Mohawk also has developed what it calls Permalink adhesive film, which can be placed directly on top of old carpet, allowing post-consumer carpet to be repurposed as carpet pad (and diverted from landfills).

Operates an 877 carpet-recycling hotline through its "ReCover" program. When consumers nationwide call the hotline, Mohawk arranges for pickup of their carpet and transports it to its growing network of recyclers.

Mohawk Group President Al Kabus (pictured here in front of bales of shredded post-consumer carpet staged for the next phase of processing at the company's Greenworks recycling facility), believes that a closed loop is the "ultimate frontier" for green manufacturing.

Al Kabus, president of the Mohawk Group, Mohawk's commercial flooring division, credits not only Mohawk but also a number of its major competitors for making great strides toward greening their operations. Still, Kabus believes that the end game in green manufacturing is "closing the loop, and bringing things full circle, where everything you produce gets taken back and remade."

"And that's been the most daunting circle for everybody to close," he says.

While Kabus calls closing the loop the "ultimate frontier" for green manufacturing, he says getting to that point involves more than just reducing, reusing and recycling.

"I look at the future of environmentalism in different components," Kabus explains. "First of all, we need to have product sustainability -- making products as responsibly as we can, but also keeping the quality of those products great. To build a 100% recycled product but have it fall apart in two years versus making a product that is built, let's say, halfway environmental but lasts 15 or 20 years -- there's a lot of argument that could go on that says the latter might be better than the former.

"So I think it's really important that we get the balance right on performance and quality versus making sure we incorporate conscious indexing of materials."

Another part of the equation, according to Kabus, is process sustainability, which involves making products in a way that minimizes the consumption of energy, water and other natural resources.

A third and "very important" component, according to Kabus, is financial sustainability.

"If you go bankrupt because you're the greenest company out there, you didn't do anyone any great shakes because you probably made a lot of product that you have out there that you didn't take back," Kabus says. "...So I think sustainability has to be not only for green in the purest sense but also for green in the cash sense. You really have to have both in play."

The Green Advantage

Increasingly, companies such as Mohawk are finding that environmental sustainability and financial sustainability can go hand in hand. Kabus notes that the Greenworks recycling facility has become a profit center for the company. And while the recession has been especially tough on Mohawk and other floor-covering manufacturers, Kabus asserts that most of the company's financial "momentum" during the recession has come from its environmental initiatives.

"We believe that these initiatives will give us an economic boon at the end of the day -- not only from the internal savings we gain from being more efficient, but also because we know our customers are looking for these solutions," he says. "So we're going full-steam ahead."

Greenworks recycling facility

Dow Chemical Co., which in 2006 unveiled its ambitious "2015 Sustainability Goals" to reduce its own environmental footprint as well as tackle environmental challenges ranging from global warming to the availability of clean drinking water, pursues environmental projects "that we believe will be economically viable" for the company, explains Neil Hawkins, vice president of sustainability and environment, health and safety. Fortunately, a growing number of projects -- from its plans for an algae-based biorefinery to its proposed lithium polymer battery manufacturing joint venture -- fit into that category for Dow, "leading to very sustainable business models for Dow."

"The nice thing is the trends in sustainability are the trends that are impacting the chemical industry, the manufacturing industry and industry in general," Hawkins says. "And because of our toolkit, being so broad in chemistry, and science and technology, and material science, we really have a very broad set of offerings to help the world meet these challenges."

Fabrinet, a contract manufacturer with more than 5,000 employees at factories in Thailand, China and the United States, defines "sustainable processes" as those that boast environmental benefits and boost profits, cut costs and provide a competitive advantage. The company specializes in optical and electromechanical components and bulk optics for the communications, telecommunications and medical industries.

In addition to employing value-stream mapping to reduce internal waste, Fabrinet uses a methodology that it calls "green-stream mapping" to identify opportunities to make its manufacturing and business processes more sustainable. Chief Operating Officer Harpal Gill explains that those opportunities might include choosing to use a molding process rather than a machining process to save energy and minimize scrap; redesigning packaging to accommodate more items per tray; shipping full pallets versus half pallets; and using electronic documentation methods in lieu of paper-based documentation.

When Fabrinet incorporates such sustainability-driven processes into its proposals for manufacturing projects, customers tend to be receptive, according to Gill.

"Typically the feedback is very good," Gill says. "The ROI for them is instant, because most of the time they don't have to invest any money. I mean, if we go paperless and develop the process, they're only too happy to see it done."

Harpal Gill, Chief Operating Officer, Fabrinet

A big part of Fabrinet's push to become a green manufacturer has been its initiatives to reduce paper and energy consumption. Fabrinet estimates that its efforts to reduce its paper consumption -- the company, through the use of an RFID system, now boasts paperless warehouses -- saved 3.5 million sheets of paper in fiscal year 2008. Meanwhile, the company calculates that it saved approximately 6.6 million kilowatt-hours of electricity, cut CO
2 emissions from power generation by 4,356 tons and saved $567,000 in electricity costs in fiscal year 2008 through its efforts to reduce electricity consumption. (The entire top floor of Fabrinet's newest facility, in Patumthanee, Thailand, is illuminated by natural lighting and uses no electric lights during daylight hours.)

"Not a bad deal: You eliminate CO2 by 4,356 tons and still save half a million dollars," Gill says.

Nabil Nasr, director of the Golisano Institute for Sustainability at the Rochester Institute of Technology, which offers a Ph.D. focusing on sustainable production systems, believes that manufacturers that implement sustainable processes position themselves to be market leaders.

"We see sustainability as a key competitive advantage," Nasr says. "If companies are able to figure out a way to make the same product with less material, less energy consumption and less emission, they'll be far more competitive than others.

"So we look at sustainability from a very practical angle, and it goes far beyond just environmental conservation. It really touches on product efficiency and reliability, and material and energy consumption in production and during product lifecycle."

'A Bigger Loop to Close'

If closing the loop indeed is the ultimate frontier for green manufacturing, the Mohawk Group's Kabus is well-aware that his company -- which is vertically integrated -- has a larger footprint to manage than some of its competitors.

"Since we go all the way back to extrusion and all the way forward to shipping products out the door, we have a bigger loop to close, you could say," Kabus asserts. "But at the same time, we also have more control and opportunity with our R&D."

When a new product is in the R&D phase, the Mohawk Group uses a stage-gate checklist, among other methodologies, to ensure that sustainability is incorporated into the materials and processes employed to make and deliver the product.

The stage-gate checklist, generally speaking, asks several sustainability questions during a product's R&D phase, according to Kabus.

"One, can we recycle it?" Kabus says. "Can we actually bring it back and tear it apart and keep it in its existing sphere of use? That would be optimal. If we can't keep it completely in its existing sphere of use, meaning turn it back into what it was before, can we take most of it, or some of it, and bring it back into its original life form? And then what do we do with the other parts? We want to make sure we repurpose all the material when it comes back."

The second sustainability question is whether recycled content can be incorporated into the product itself, Kabus explains, and if so, whether it's feasible to use post-industrial (pre-consumer) content or post-consumer content.

A third sustainability question addressed during R&D: "Can we dematerialize it?"

"Even if you build something with recycled content, and even if you make it out of the most recyclable material, you have to take into consideration two things: One, what is the energy it will take to deconstruct it or dematerialize it when you bring it back, and two, how much energy does it take to remake it again?" Kabus explains.

"Also, if you're bringing in a new technology, how do you dematerialize it in the sense of how do you get more out of less? An example in electronics would be going from a tube-screen to a flat-screen monitor. We continue to see more sophisticated materials that can do a lot more while using less material."

R&D not only applies sustainability standards to new flooring products but also to its own design processes. In lieu of carpet samples, R&D personnel produce digital simulations of designs, colors and textures. According to Mohawk, every simulated sample saves one quart of oil and eliminates the fuel necessary to ship carpet samples.

Perhaps lost, though, in the discussion of sustainability is product quality and customer satisfaction. "The best sustainability story in the world for Mohawk is to design carpet that stays on the floor years and years longer than average commercial lifecycles," Kabus says.

"If I build a product for you that I can take back and make into the exact same product, I still have to rip it up, send it back, process it, remake it, send it back to you and install it. And that requires a tremendous amount of energy and resources."

That's a big reason why Mohawk tries to keep its finger on the pulse of long-term color and style trends, and why the aesthetics of flooring plays a key role in the company's sustainability efforts.

"The color can go out of style quicker if you're in the tail end in the lifecycle of a color trend," Kabus explains. "So we try to take a more long-term orientation, whereby if today's accents are tomorrow's bases, we're focused on making sure we're extending ourselves out to the next trend and color without coming out too flashy, so we get the maximum lifecycle of a color trend.

"That way we get to keep our products on our customer's floor longer."

What's Next?

Mohawk's green journey, like that of many other companies, has accelerated in recent years. Kabus can remember a time within the past decade when sustainability went from being "something that was nice to hear or 'Hey, I don't have time for it now' to being something that's absolutely integral in every project we touch."

"So it's been a very quick maturation process," he says.

Going forward, Kabus expects Mohawk to continue to formalize its sustainability objectives. If there's any question as to how formal the sustainability effort has become, he notes that Mohawk recently created the position of chief sustainability officer, whose responsibilities will include creating a "more holistic sustainability report" to provide a true picture of the company's green efforts.

The overall challenge, of course, will be creating a business model that achieves both environmental and financial sustainability.

"If you come up with something that's the most environmental product in the world, but it sells for a hundred times more than your nearest competitor, no one will buy it -- it prices itself out of the market," Kabus says. "So you have to build the business case -- the economics -- and we really try to find that intersection of environmental performance and economic return, and we have to make sure [a product] is going to be viable in both regards."